Purpose

To consolidate, disseminate, and gather information concerning the 710 expansion into our San Rafael neighborhood and into our surrounding neighborhoods. If you have an item that you would like posted on this blog, please e-mail the item to Peggy Drouet at pdrouet@earthlink.net

Wednesday, October 30, 2013

The U.S. Transportation System Has $100 Billion Worth of Inefficiencies

You don't have to be an economist to know the American transportation system is in bad shape. The country's roads and bridges are crumbling
despite what seems like endless construction. Public transportation
operates under the continual threat of service cuts or fare hikes, or
both. Airplanes sit on runways and metro area commuters sit in rush-hour traffic. Lots and lots of traffic:

But it does help to be an economist if you want to convert this sad
state of affairs into a monetary figure. Clifford Winston of the
Brookings Institution has done just that. In an incredibly thorough
overview of the American transportation system (introduction here, full text here), Winston calculates that its many inefficiencies are worth more than $100 billion:

[O]ur hugely important transportation system has been compromised by
policies that have resulted in inefficient pricing, suboptimal
investments, and inflated production costs that are manifested in
congestion, delays, budget deficits, and excessive money and time costs
to users and excessive government expenditures on transportation.

Winston's report is far too detailed to convert into a quick summary.
But he makes some points that concern us all — particularly metro area
residents — so we've plucked out the inefficiencies he describes and
itemized them here. Keep in mind these are extremely conservative
estimates; the actual inefficiencies no doubt cost America much more:

Car traffic: $45 billion. The estimated costs of
congestion vary widely, but Winston focuses on travel delays that occur
as a result of highways being free to drivers rather than priced to
reduce traffic.

Inefficient highway funding: $13.8 billion. Federal
gas taxes are sent to Washington then reallocated back to the states;
Winston (and others) believe this system is flawed because it fails to
redistribute more money to the most-congested cities.

Air traffic: $16 billion. These are takeoff and landing delays caused primarily by a lack of runway capacity.

Transit subsidies: $10.6 billion. Winston argues that
transit fares are too low and that systems don't manage their routes
efficiently — running more buses and trains than are needed.

A quick tally puts the total far in excess of $100 billion — in the
area of $180 billion. The list isn't perfect; cities often run empty
buses for perfectly good reasons,
for example, though Winston counts this practice as an inefficient
transit subsidy. But the broader point about there being massive room
for improvement remains all too true.

What to do about the problem? Winston offers two types of suggestions.
The first is to improve public-sector management — both by reforming the
transportation finance system (i.e. the busted gas tax)
and by spending more money on infrastructure. The second is to expand
the role of the private sector via deregulation. Both options are broad
solutions that carry cautions of their own.

The best response might be to target these inefficiencies bit by bit,
as Winston suggests, through local experiments. A thorough congestion pricing scheme
in and around a major American city, which might include not only
interstate toll lanes but downtown charging zones, has reduced commuter
delays dramatically in other parts of the world. Such a plan wouldn't
eliminate the entire annual social cost of American traffic, but with a
problem this big you have to start somewhere.